For a company to attain legal status, it must be incorporated. Incorporation refers to the registration of a company, business name or incorporated trustee with the statutory body legally empowered to do same. In Nigeria, this statutory body is the Corporate Affairs Commission (‘CAC’) created by statute (Companies and Allied Matters Act 1990). It should be noted that registration of a private entity may either be done personally by individuals or a group of people seeking to register their businesses or by those accredited with CAC, for instance, Lawyers.
A company’s duties and obligations do not cease upon incorporation. To this effect, a company has the following post-incorporation duties:
This consists of a yearly statement that gives a view of the company’s performance for the year and its financial position. It is statutorily required that all duly registered businesses, companies, and incorporated trustees submit their annual returns yearly to the CAC. This allows the Commission keep records of the company/business and confirm it is still in operation and will not be dormant in the nearest future. The CAMA mandates all businesses, companies and incorporated trustees to submit their annual returns for filing within a prescribed period of time.
Failure of a registered business to file its annual returns attracts a penalty of N2,500 for each year not filed.
A duly filled annual returns form signed by a director and the company secretary should be forwarded to the Commission for filing with a copy of the company’s financial and audit report for the year and all applicable fees paid.
Failure to file annual returns currently attracts a penalty for each year not filed of N3,000 for small private companies with share capitals of less than N2 million, N5,000 for larger private companies with share capitals of more than N2 million, N10,000 for public companies and N5,000 for companies limited by guarantee.
The names, addresses and occupations of the trustees and members of the governing body, particulars of any land held by the trusteeship during the year and any changes which have taken place in the constitution of the trusteeship during the preceding year are matters contained in these kinds of annual reports.
Failure to file annual returns attract a penalty of N5000 for each year not filed.
Default: CAC is empowered to strike off names from the Register of Companies where it reasonably believes that the Company/Business/Incorporated Trustee is no more in operation.
A company/legal entity continues to grow; hence, there may be significant changes in the company’s structure of which the Commission must be notified. Such changes may include:
It is mandatory to file a notice of any of these and other changes with the CAC for record purposes and in compliance with the provisions of CAMA.
CONCLUSION/ACTIONS TO TAKE:
By: Kitan Kola-Adefemi
For: Mind The_ Gap
MAJOR RESEARCH SOURCES: